[04:38:01 PM] => The Chat will be starting in a few minutes. Mr. John Band will be joining us soon.
[04:39:02 PM] => Please hold on for the chat to begin. We apologise for the delay.
[04:47:10 PM] => DISCLAIMER
[04:47:31 PM] => Mr. John Band is the CEO of ASK RAYMOND JAMES - a 50:50 joint venture between Raymond James Financial Inc. of the USA and ASK Investment and Financial Consultants Private Limited of India. Raymond James Financial Inc. is a diversified financial services holding company with subsidiaries engaged in brokerage, investment banking, asset management and cash management, investment and financial planning and trust services. The asset management subsidiaries manage in excess of US$ 15 billion for individuals, pension plans and municipalities. At the time of this conversation / chat, Mr. Band may or may not have positions in the stocks mentioned below , although holdings may change at any time.
[04:47:50 PM] => The views expressed by Mr. John Band is based upon information that he considers reliable, but does not represent that it is accurate or complete, and it should not be relied upon as such. Mr. Band, his company and its affiliates, officers, directors, partners, and employees may, from time to time, have long or short positions in, buy or sell and deal as principal in the securities, or derivatives thereof, of companies mentioned herein and may take positions inconsistent with the views expressed. None of the information contained herein constitutes, or is intended to constitute a recommendation of any particular security or trading strategy or a determination that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. You should consult with and rely upon your own advisors whether and how to use such information in making any investment decision.
[04:48:02 PM] => Lastly the views expressed by Mr. Band have no bearing whatsoever with that of IRIS Ltd. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website www.myiris.com.
[04:48:53 PM] => Myiris.com : Welcome to the live Chat Session Mr John Band
[04:49:57 PM] => rksheth : Do you actually believe in this new and old economy funda : Isn't 'a business a business' so why distinguish between the ICE and the Old
[04:50:36 PM] => John Band : I agree that the valuation of a business should depend on its prospects rather than whether it is old or new economy, but since the new economy has demonstrated the ability to grow at rates much higher than the old, it is likely that more growth stocks will emerge in the new economy.
[04:50:58 PM] => sachin_ps : Are futures and options superior to badla trading?
[04:51:33 PM] => JB : In general terms, yes. The badla system allowed retail investors to run with risk levels they only appreciated when brokers began calling for margin money on stocks which went down circuit for several days in succession. To the extent that brokers failed to collect margin money, the risk was transferred to the brokers and has resulted in broker failures. Additionally, some brokers who took money from clients for badla financing actually used it for other purposes, resulting in several further failures. With options, a retail investor puts up the amount he has at risk on opening his position. He has no potential for losses beyond his upfront payment. Futures require daily margin adjustments, are too complicated for retail investors and should be restricted to institutional and professional investors.
[04:52:33 PM] => ramya_rao : Do you think the right way for NASDAQ is to go for an IPO itself? Would this help it overtake the dominance of NYSE?
[04:53:00 PM] => JB: The additional capital will enable it to continue to compete with the NYSE, to the benefit of investors.
[04:53:28 PM] => A-agrawal : Some time back Mr. Mark Mobius talked of the decoupling of the Emerging Market Index with that of the Nasdaq and the effective gains thereof. Do u actually subscribe to this theory - I really can\'t see my investments battered like this
[04:53:53 PM] => JB : All markets are linked to some extent. The FTSE index in London correlates to a 60:40 Dow/NASDAQ mix and to the major European markets. Tech stocks in India correlate to the NASDAQ, but the correlation between non-tech stocks and the NASDAQ or even Dow is much less because of their dependence on the Indian economy, which is not well correlated with other economies. So to the extent that emerging economies succeed against a global trend, their domestic stocks have the potential to demonstrate negative correlation.
[04:54:21 PM] => Lynx : What is your opinion on Aban Lloyd Chiles Offshore the only Indian Rig owning Co (after it takes over Hitech Drilling). American Rig Cos share prices are at 5 year highs with Rig Day rates also at 5 year highs(almost)
[04:54:56 PM] => JB : Yes but US oil companies have a track record of successful discoveries, and rapid exploitation of finds. In comparison, India�s record is poor (especially HOEC), so it will take time for confidence to build in the new round of licenses
[04:55:28 PM] => Gul : -The Indian economy and the investors in our esteemed Stock markets have their TALE between their legs- do you see a revival in both the economies i.e. the new and the old . Within what time frame ?
[04:59:01 PM] => Kindly hold on Mr. Band is on the phone
[05:00:17 PM] => JB : The new economy will revive with the international economy (i.e. over nine months or so) and the old economy as the government sector shrinks, i.e. over several years. Markets always anticipate, so stocks should perform ahead of the actual revival in the underlying economy
[05:01:26 PM] => sudhirkhurana : investment potential of TV-18, Gillete India, Jai Prakash Industries, Idbi Bank, Tisco, Tata Tea, Balaji Telefilm, Digital India
[05:02:00 PM] => JB : TV-18 too expensive, losing money, failing to deliver on strategy, avoid,
[05:02:47 PM] => Gillette poor performance, avoid , Jai Prakash flaky history, major holdings locked up, only hope I if promoter sells out and he says he won�t, avoid, IDBI Bank psu, avoid
[05:03:24 PM] => Tisco overmanned, quasi psu, avoid, Tata Tea cyclical at wrong stage of tea cycle, but good long-term strategy, watch, Balaji unfashionable, because of KP association, but probably a buy, Digital second line software stock with no usp, avoid
[05:04:04 PM] => akhilbull : your view on lupin labs
[05:04:30 PM] => JB : prefer Cipla and Dr Reddy�s much more substantial businesses
[05:05:13 PM] => seas : I want to buy shares of ABB LTD, shall I buy it now or later.
[05:05:43 PM] => JB : Whenever you like, but I think BHEL has more upside
[05:06:10 PM] => Padmakakl: Why do the Indian markets follow NASDAQ? Is there any correlation
[05:06:40 PM] => JB: Refer to answer to aagrawal above
[05:06:59 PM] => Hiren : How would u compare the valuations of RPL with its peers- could you also justify the need of the "talked" ADR
[05:07:24 PM] => RPL is an aggressive private sector business which needs distribution if it buys IBP it will be a winner and need the ADR proceeds for building its distribution. Its peers are psu�s with no marketing competence or bottom-line focus. But they could be attractive if the government sold them to the mnc�s that used to run them so much better
[05:08:10 PM] => Karthikeyan : Do you think that one should advocate the Replacement Cost theory inorder to value the Old Economy Stocks like ACC , MTNL etc.. since a takeover of such a company at current levels would enable the acquirer to take control at dirt cheap prices?
[05:09:10 PM] => JB: Sort of. Replacement cost is particularly important in an industry with good growth prospects, limited capacity and limited technological change. If our economy were to perform (for example as a result of mass privatisation) to its potential, cement would clearly be in this category. MTNL is different, it is an overmanned psu with a lot of obsolete equipment. Competitors have better technology fewer workers and sane owners.
[05:10:00 PM] => Jajoo : Stocks in the technology sector have rebounded sharply inspite of the latest round of earningsreports and growth forecasts from leading tech companies. Could the downturn that has weighed on the sector in recent months be near its bottom? Or is it too soon to make that call ?
[05:11:27 PM] => JB : There will still be volatility over the next several quarters. With similar client bases, Hughes Tele is indicating 60% growth, Wipro is indicating 45% and Infosys is indicating 30%. Either Infosys is too pessimistic, or Hughes is too optimistic, or Hughes is twice as good a company as Infosys. Prices will change as the quarters unfold, but if Infosys turns out to be right for the whole industry, many of the larger stocks are still overvalued. And many of the smaller ones were friends with Ketan Parekh and have not yet been punished enough for keeping bad company. So there will be big money to be made and lost
[05:12:17 PM] => Neha_dk : What according to you can spur the Indian equity market and so you agree with Mark Mobius when he says that the Indian Currency is Undervalued
[05:12:57 PM] => JB: The Indian currency is not undervalued we are not running a trade surplus or attracting sufficient foreign investment.
[05:13:37 PM] => Bsawant : Do our PSU\'s offer value at these levels . How would you compare them to value (if any) being offered in some New Economy stocks
[05:14:29 PM] => JB ; Our Psu�s (with a very few exceptions) are incapable of delivering shareholder value unless they are sold, and our government doesn�t usually sell them until it or market forces - have destroyed most of the intrinsic value.
[05:15:34 PM] => Maitri : Your comments on VSNL and its business plans - worth a buy or are they other players in the same Industry who offer better value
[05:16:53 PM] => JB : Their Internet quasi-monopoly, especially of business users, is still a big asset, but unless the government bails out and gives a free hand to the new strategic/privatisation partner, the collapse of its international revenues will not be offset by organic growth in other areas, where leaner, meaner competitors are lining up.
[05:17:58 PM] => Inder : RBI is signaling lower interest rates, the banks are slush with funds (no projects / industrial borrowing) so where should the common man put his money. Would you advise to put ones money in the market at this point , in which stocks?
[05:19:39 PM] => JB : We still like Colgate; Grasim; HCL Tech; HLL; Nestle; TVSS; Satyam.
[05:20:01 PM] => Sanjay : IS SEBI A BEAR or IN WITH THE BEAR CARTEL- on one hand you ban shorts but existing shorts continue - is that Fair . Is it not helping the case of the Bear Cartel (alleged) so to speak - your comments
[05:22:06 PM] => JB: The Bear Cartel is a mythical beast like the Unicorn which is used by brokers who have put their clients into overvalued rubbish to avoid responsibility for the subsequent losses. No sir. I was not an idiot to recommend that you buy HFCL at 1400, I could not forsee that the Bear Cartel would hammer the stock into the ground.
[05:22:23 PM] => Having pessimistic investors knock overvalued rubbish down helps reduce market excesses. The ban on short sales was a nonsense and it will not be with us much longer.
[05:23:09 PM] => Shahjiggi: What do you think the regulator should do to avoid scams like KP happening again?
[05:23:37 PM] => JB: Moving speculative retail trading to the options market would be a help. Privatizing and better regulating our banks would help the whole country, not just the market.
[05:24:16 PM] => Vishal2000 : IS there anything like a happy marriage on our stock markets or is it only a three day honeymoon followed by a lot of pain
[05:24:49 PM] => JB: The old economy stocks need our old economy to grow, the IT stocks need the US to grow. Achieving both of these would be a happy marriage for the market.
[05:26:34 PM] => Pooja : Do you see FII flow sustaining in India . Will UTI keep on supplying stock even at these levels - are we headed for a crash say 2800 index
[05:27:02 PM] => JB: FII flow will sustain for as long as the Indian economy remains stronger than other Asian economies and the market looks cheap compared with other Asian markets. It is these inflows which have saved us from being a 1,800 market! But provided the US does not dive into deep recession, the FII inflows continue and there is no major outbreak of lunacy in Delhi, we should have more upside than downside.
[05:27:45 PM] => Pattist : How is buying Kothari Internet Opportunity fund at present NAV
[05:28:06 PM] => JB: I am sorry but I am not familiar with the underlying portfolio and cannot comment
[05:28:28 PM] => Rshanbhag : Do you believe that SEBI has been an effective regulator? Why?
[05:29:18 PM] => JB: I believe SEBI has done a pretty good job against the usual Indian background of ignorant knee-jerk politicians, powerful lobbies, a jealous (and underperforming) RBI and a disintegrating legal system.
[05:30:09 PM] => So far as markets are concerned we have greater transparency, paperless settlement, lower transaction costs and a Takeover Code that represents a huge improvement.
[05:30:39 PM] => Many of the areas that cause problems gross speculation, insider trading and market manipulation with borrowed money and so on have continued because reforms sought be SEBI have been defeated by powerful lobbies oer because the RBI is a weak banking regulator. But each new scandal strengthens SEBI�s hand.
[05:31:06 PM] => I do have three major areas of concern:
[05:31:21 PM] => one is that SEBI has failed to develop a cadre of its own senior officers many employees are seconded from other government departments. SEBI must build a team capable of regulating the markets and resisting ill-judged political interference and business lobby groups; and to retain staff able to regulate high-paid market professionals, SEBI needs to be able to offer remuneration packages better than those of the government sector generally.
[05:31:54 PM] => a second is the involvement of lawyers and the courts in efforts to influence or challenge SEBI�s decisions. Fortunately most recent court decisions have come down in SEBI�s favour and SEBI should use this to be firm in making directives, but fair in hearing both sides of a story.
[05:32:19 PM] => The third area of concern is that the investigation process needs to operate more often, but more fairly. It was unfortunate that the hunt for the mythical Bear Cartel resulted in an interim report submitted in haste to Delhi without giving those named a hearing.
[05:32:48 PM] => If SEBI is to be protected from intense legal scrutiny of its decisions it must make every effort to be fair in its actions.
[05:34:00 PM] => Sanjaymahtani : Forget Two economies if we can have one that is enough - jokes apart do you really see industrial growth picking up. Secondly is Privatization really going to happen - does the government have the political will
[05:34:40 PM] => JB: Our big hope is that the private sector will take over more and more of the former functions of the government especially in infrastructure. As the government sector shrinks, the opportunity to deliver higher growth increases
[05:35:28 PM] => Harrish_zaveri : This is a question basically on the prospects of the old economy sectors. Cement prices are expected to recover post monsoons, LCV prices have been raised upwards and Jan/Feb/Mar volume growth has not been too bad either, aluminium companies seem to have orders to power generating companies for captive power plants and steel exports seem to be doing reasonably well. Are we at the bottom of the bear market?
[05:36:35 PM] => JB: Yes, as I said before, provided the US does not dive into deep recession, the FII inflows continue and there is no major outbreak of lunacy in Delhi, we should have more upside than downside.
[05:38:26 PM] => Rajesh Parekh : Why is it that Financial Services Companies in India not get good valuations inspite of having shown good earnings and growth figures in the past? Infact all these outfits now have large customer franchises like any other large company in the country.
[05:39:06 PM] => JB: There is a prejudice of investors against all finance companies, because of past misdeeds by some companies. Also, since outfits like GE have aggressively taken market share from Desi outfits, investors are properly concerned about whether typical NBFC�s have any real growth prospects. However, good companies like Birla Global Finance are on ridiculously low valuations.
[05:39:48 PM] => Rkhan : What is Brightstars stand on the recent bid on VST?
[05:40:17 PM] => JB : We have agreed a disclosure with SEBI, which should enable our bid to proceed next week?
[05:40:53 PM] => AbhisekInc : I have ZEE at RS98 should I hold,buy or exit
[05:41:21 PM] => JB: Hold until you see something you want to own more
[05:41:54 PM] => Sapna_P : Given the current market scenario, is this a good time to enter the market. I have never invested in stocks before.
[05:42:29 PM] => JB: There is never a right time to enter the market or at least, you only find out when it was when it�s too late to act. The best technique for new investors is called averaging put in some money each month or each quarter and insulate yourself from some of the fluctuations that you might face from putting lots in at one go.
[05:43:59 PM] => Miteshbvora: What do you think of Aftek Infosys at current levels, with such good numbers in the last quarters.
[05:44:18 PM] => JB: Aftek infosys is a second-line stock with no usp most investors will ignore it
[05:45:51 PM] => Vdealer :What do u think about the market behaviour after
[05:46:44 PM] => rolling settlement in terms of volume and price fluctuation's
[05:47:04 PM] => JB: volumes will go through the floor until people get used to option trading but I think volatility will stay about the same.
[05:47:39 PM] => Mayank :what is your outlook for the next six months on the equity markets
[05:48:05 PM] => JB: Delhi permitting, a continuing gradual recovery with a few gyrations with each quarterly set of results in the software sector
[05:48:45 PM] => Esquireenergy : is market bottomed out which sector looks good. what about Hfcl and Global Tele ?
[05:49:41 PM] => JB: Hfcl can never look good, whenever Vinay Maloo gets his hands on any money he wastes it. The fundamentals are poor. Global requires a leap of faith, since the current business has no track record. If you believe Manoj Tirodkar is the man to bring e-commerce to success in India, the stock is cheap. I am an agnostic.
[05:50:22 PM] => Dealer :Do u think that market would remain range bound until full clarifications from SEBI regarding rolling settlement?
[05:50:49 PM] => JB: Yes, but with the range trending upwards
[05:52:03 PM] => Dealer :What is your outlook on Media stock? If positive than name me two bargain buys for one year investment.
[05:52:21 PM] => JB: For an investor who likes risk, Balaji Telefilms and Mukta Arts
[05:52:43 PM] => Rkhan :can we expect some more takeover bids (courtsey u!!!)?? appreciate your efforts to enhance the shareholders value ?
[05:53:22 PM] => JB: I hope so, but first we have to get the VST bid out of the way
[05:57:11 PM] => Dealervedansh2000 what are the prospects of colgate over the next 3-5 years
[05:57:40 PM] => JB: They should be good - they have a lot of under-exploited brands and their penetration in India is low. They revamped the management team a year or two back and things seem to be going OK. However, Colgate has disappointed in the past. But We have a buy on it
[05:58:18 PM] => Abhishekmaloo :What are your views on the fmcg sector .Any stocks that u feel are a worth buy at current prices
[05:58:43 PM] => JB: Colgate (see above); Nestle; HLL (at these prices) all look OK
[05:59:15 PM] => Balu: Do you see a significant wealth creation opportunity in media stocks? What could be the characteristics of a \"multi bagger\" in media stocks?
[05:59:45 PM] => JB: Yes, but post Bharat Shah and Ketan's incarceration there is considerable investor skepticism. Any well organized and clean movie production house should be able to make a heap of money. So should the multi-channel TV operators who get all their distribution (including all major international markets) properly organised and their costs under control. Potentially this is mainly Zee and SETV. However, market sentiment will take some time to recover.
[06:00:32 PM] => Dealer :what is your suggestion about old economy stocks? please specify about TISCO and LARSEN
[06:00:58 PM] => JB: TISCO is overmanned and needs more investment, on which it will be hard to make good returns. Larsen is a nightmare - they have great engineering skills and lousy financial ones. The cement strategy denies shareholders the chance to participate in unlocking value in these assets. This is useless company for shareholders.
[06:02:32 PM] => Myiris.com - sorry friends but we are overloaded with Questions, so no more questions please
[06:04:42 PM] => JB:My fingers are aching can I take a break !!1
[06:05:55 PM] => Kindly hold on Mr. band is busy on another line
[06:09:14 PM] => J.Ananthanarayan :How are Clariant and Ciba Specialityfor value investing
[06:09:31 PM] => JB: Too illiquid even value investors need an exit, eventually
[06:09:56 PM] => Ritul_sanghvi : have around 1500 RIL shares (half ot issue and half ofbonus)Please advice..hold.sell?
[06:10:17 PM] => JB: Reliance is in the doldrums, but sell as you find things you like better, not just for the sake of it.
[06:11:02 PM] => Nashot :Is the current boom in thelast few days justified considering that rates have softened substantially andresults for Q4 take into a/c boom times tanker rates ??
[06:11:36 PM] => JB: You don�t say what the stock is. But if its Great Eastern, the driver is the news of more buy back. GE promoters need to increase their stake to avoid another GESCO style bid. More evidence that takeover bids are good for shareholders.
[06:12:18 PM] => Aditya_kandoi: leverage buyout happen in India and is buyoutfunding available Please let me know your views on the IndianTakeover Code and your email address for business purpose
[06:12:40 PM] => JB: beyond the scope of today�s chat!
[06:13:18 PM] => Pai314 :How will you explain the Indiansoftware firms getting better valuations than established product players like Microsoft and Cisco. How is their one dollar more valuable than the international players
[06:13:39 PM] => JB: The valuations are based on better perceived growth prospects
[06:14:01 PM] => Tarunraj :If I am not wrong, you had termedNIIT as the plague of the Indian Software
[06:14:28 PM] => JB: You are wrong. I believe NIIT is a great training company and a second-line software company. The outlook for training is weak in the short term and the outlook for second-line software companies will get progressively tougher.
[06:15:15 PM] => HSbhandari : Please comment on Unitedbrew, Rel.Petro.
[06:15:47 PM] => JB: United breweries : not shareholder friendly in the past, improving, but not yet compelling. Reliance petro could be very good if it buys IBP, otherwise needs a lot of spending to build distribution
[06:17:17 PM] => nks2001 : Sir I have several stocks ranging from ZEE,Satyam,Infosys,Wipro, to DSQ andHLL. I have made substantial investment upto RS.70000 and today I am under severe loss of Rs.30000-Rs.40000.Is there any chance of recovering my money in near future.If yes. Please tell the approx. time frame.
[06:17:40 PM] => JB: No chance in the near future, but expect a gradual recovery over the next year or two
[06:18:00 PM] => Tea :which , at the current price is the best bet in the private sector bank ?
[06:18:23 PM] => JB: question is too hard. HDFC Bank is the best, but it�s too expensive.
[06:19:29 PM] => Myiris.com - Sorry friends, but Mr John Band will answer only last three questions
[06:21:44 PM] => Rajshi from what I read of your replies, u seem to be stating that one should only invest in front liners, but the fact is that Wipro,Satyam and even Infy were second liners before they became first liners. Similarly the case of HLL versus Colgate.
[06:22:28 PM] => JB: First, when Infosys, Wipro, and Satyam were second liners, there were no font-liners in their industry. It is much tougher for second liners in the IT Business nowadays
[06:22:46 PM] => Secondly, the market may well see a further decline in Second-liners when we move to compulsory rolling Settlements with no carry-forward.Thirdly, standards of corporate governance are variable in the second-liners. That�s why my general advice right now is as it is.
[06:23:31 PM] => However, if you are prepared to do serious analysis and take the long view, India�s second line stocks must include some real bargains at current low valuations. But its hard work to weed them out.
[06:23:58 PM] => purker You say it is good for an investor to enter through averaging. Don't you think
[06:24:24 PM] => statistically you are better off entering beaten down market and exiting inflated markets without worrying about any other thing
[06:24:48 PM] => JB: If only life were so simple many people who buy into what they think is a beaten down market find it falls further and many people who call a top early miss out on huge appreciation. Remember our market stands 1100 points below 1992�s high. On most
[06:25:11 PM] => Views it was beaten down at 4500 after the 2000 budget.
[06:25:44 PM] => umeshagrawal : do u think the Indian markets will become as deep as the ones in the developed countries and if yes, when
[06:26:04 PM] => JB: when the government cuts its deficit and allows private pension funds to become the major domestic institutional investor that should only take another 50 years.
[06:28:48 PM] => Thanks a million viewers and especially Mr. John Band to have spared his valuable time with us
[06:30:08 PM] => Myiris would like to remind its viewers to kindly send in their questions for Mr. Chandresh Nigam - Fund Manager Zurich AMC India Ltd. who shall be joining us live on Monday 7th. May 2001 at 4.30 pm